Pros and Cons of RWI in Merger and Acquisition Transactions

By William F. Miller  February 18, 2020Business

Representation and warranty insurance (“RWI”) has been around for some time. Historically, it was most commonly used in large transactions, often involving publicly traded companies. However, in recent years it has become much more common in smaller, private, “middle market” transactions. As the name implies, RWI provides insurance protection to a party (either the buyer or seller) in the event the representations of the seller in an asset purchase agreement, stock purchase agreement or merger agreement are breached and the buyer suffers damages as a result of such breach. In some cases, it may also provide protection for the buyer in the event of outright fraud by a seller.

Predictably, there are pros and cons to RWI that must be carefully weighed by both buyer and seller. Furthermore, that process needs to start early because the decision to seek RWI will impact negotiation of the purchase or merger agreement.

PLDO partner and business attorney, William F. Miller, describes RWI benefits and what the insurance does not typically cover in his latest advisory, The Pros and Cons of Representation and Warranty Insurance in Merger and Acquisition Transactions. He also offers practical and financial considerations to help organizations make informed decisions. If you have questions about RWI or other business matters, please contact PLDO Partner William F. Miller at 401-824-5100 or email wmiller@pldolaw.com.

 

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William F. Miller is a Partner with Pannone Lopes Devereaux & O'Gara LLC and a member of the Corporate & Business Law Team. He is a highly skilled attorney with more than 30 years of experience who focuses his practice on corporate and business law matters, including mergers and acquisitions, angel, venture capital and private equity financing, commercial contract matters, intellectual property protection and licensing, and entity and investment fund formation. Mr. Miller frequently advises early stage technology companies, manufacturers, service and distribution companies as well as investors in such companies. He also has significant experience in representing wind turbine manufacturers, suppliers and commercial end-users in connection with wind turbine acquisition, maintenance and warranty agreements. With more than $3 billion of transactional experience, Mr. Miller has represented a wide range of local, national and international clients, including media, private equity and financial services, retail, professional sports teams, non-profit institutions and consulting and management firms, among others.

Mr. Miller earned his J.D., cum laude, from Suffolk University Law School, his LL.M. in Taxation from Boston University School of Law and he holds an undergraduate degree in Economics from Brown University. He is admitted to practice law in Massachusetts. Mr. Miller has been recognized on multiple occasions as a Massachusetts Super Lawyer in Mergers and Acquisitions.

To contact Attorney Miller, please call 401-824-5100 or email wmiller@pldolaw.com.

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